The Ghanaian Cedi crossed the much dreaded GHC 5.0000 mark against the US Dollar on the Bank of Ghana (BoG) inter-bank trading platform as it further extended its losing streak against the greenback this week. It however built on previous week’s gain recorded against the British Pound Sterling and recovered part of previous weeks’ losses against the Euro. On the Open Forex Market (oanda.com), the Cedi posted losses against all three major trading partner currencies. The Cedi’s continuous depreciation against its major trading partner currencies puts it as one of the worse performing currencies among developing and emerging markets’ currencies. This comes on the back of a sharp rise in demand for forex by importers and corporate institutions, outstripping the central bank’s regular interventions in the currency market.
It is expected that the central bank’s regular intervention in the currency market will be supported by the proceeds from the government’s intended USD 403 million bond issuance under the Ghana Amalgamated Trust (GAT) financing program. The bond which is to be issued in the first quarter of the year is targeted at raising capital to finance the five (5) undercapitalized but well governed local banks that were unable to meet the BoG’s minimum capital requirement as at the 31st December deadline last year. Offshore investors participation in the bond program will go a long way to shore-up the short-term supply of forex on the currency market.
On the BoG inter-bank trading platform, the Cedi lost 0.95%, week-on-week, to trade at GHC 5.0028 at the start of the week from previous week’s trade value of GHC 4.9550. The Cedi came in strong to post gains against the British Pound Sterling and the Euro as it appreciated by 0.45% and 0.30% to begin the week at GHC 6.4401 and GHC 5.6482 from previous week’s trade figures of GHC 6.4692 and GHC 5.6653 respectively. Investors sold the Pound after a series of data in recent times pointed to a gloomy outlook for the UK economy. The Pound fell against a host of currencies including the Cedi after official GDP figures showed that Britain’s economy contracted by 0.4% in the last quarter of 2018, the slowest growth ever recorded since 2012.
On the Open Forex Market (oanda.com), the Cedi depreciated by 3.09%, 1.80% and 1.82%, week-on-week, to begin the week at GHC 5.1440, GHC 6.6351 and GHC 5.8138 from previous week’s trading values of GHC 4.9896, GHC 6.5179 and GHC 5.7097. The Cedi recorded its third week-on-week decline against the greenback as hopes of a breakthrough in US-China trade talks and a tentative deal to avoid a US government shutdown boosted investors’ appetite towards the Dollar. The Dollar also gained against a host of trading partner currencies as traders piled into the greenback in a safe-haven move on worries about a weakening global economy.
According to the Bank of Ghana inter-bank rates, the Ghanaian Cedi began 2019 at GHC 4.8291 [January 2nd, 2019] against the US Dollar and is currently selling at GHC 5.0028 [February 11th, 2019] indicating a 3.60% year-to-date depreciation. Similarly, on the Open Forex Market (oanda.com), the Ghanaian Cedi traded at GHC 4.8780 [January 2nd, 2019] and is currently trading at GHC 5.1440 [February 11th, 2019], representing a 5.45 % year-to-date depreciation of the Cedi against the US Dollar.